PIGEON (YAXLEY) LIMITED

Executive Summary

Pigeon (Yaxley) Limited has a strong asset base in investment property but currently holds a negative net asset position due to significant long-term liabilities, predominantly shareholder loans. The company maintains good short-term liquidity and benefits from secured bank financing; however, reliance on discretionary shareholder funding and absence of profitability warrant a conditional credit approval. Close monitoring of cash flow, asset valuations, and debt servicing capability is essential going forward.

PIGEON (YAXLEY) LIMITED - Analysis Report

Company Number: 13061397

Analysis Date: 2025-07-20 13:29 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Pigeon (Yaxley) Limited operates in real estate investment with substantial fixed assets (£4.62m investment property) but currently reports net liabilities (£42.8k) due to significant long-term debt (£5.95m). The company shows adequate liquidity with strong cash balances (£1.37m) and positive net current assets (£1.28m), but the negative net asset position and reliance on shareholder loans with discretionary repayment terms introduce credit risk. Approval is recommended subject to ongoing monitoring of cash flow sufficiency to meet interest obligations and any changes in the property market affecting asset values.

2. Financial Strength:
   The company’s balance sheet is asset-heavy with investment property valued at £4.62m. Current assets exceed current liabilities by £1.28m, indicating good short-term liquidity. However, long-term liabilities total £5.95m, including a £1m secured bank loan repayable in 2028 and £4.95m in shareholder loans without fixed repayment terms. The negative net asset position (-£42,781) stems from accumulated losses (£47,730 P&L deficit). The equity base is minimal (£4,949 share capital), highlighting dependence on external financing. The loan structure and security on property mitigate some risk, but overall financial strength is moderate due to leverage and negative equity.

3. Cash Flow Assessment:
   Cash at bank and in hand of £1.37m provides immediate liquidity cushion. The company has no employees other than directors who receive no remuneration, reducing operational cash outflows. Interest payments on bank loans are fixed and known; shareholder loans bear 7% interest payable annually, which must be covered by rental income or other operating cash flows. The absence of profit and loss filings limits visibility on operating cash generation, but the directors’ assumption of continued shareholder support and the secured nature of the bank loan provide some assurance of cash flow stability in the near term.

4. Monitoring Points:

• Subsequent annual accounts to confirm improvement in profitability and reduction in net liabilities.
• Cash flow statements or management accounts to track rental income and interest coverage ratios.
• Status and valuation of investment property, especially in changing real estate market conditions.
• Repayment or restructuring of shareholder loans and any changes in loan terms.
• Timely filing of future accounts and confirmation statements to ensure compliance and transparency.